Newman Atkinson says:

Most Christmas Tree Loops are usually built with to tight of curves. The tighter the curve the more trouble you will have with more expensive cars as they need shallower curves.

I did just what you are doing and the outer track is an 18 inch curve. I later installed a track inside the previous loop which sadly ended up less than a 16 inch radius. Yes they both work but I am limited to less expensive engines and cars that will make the curves. Both tracks are to tight for any engine larger than 4 axles and spine cars will hit the frames of the other cars and will not allow room for the wheels to stay on the track.
I still use the loop of track today as it was under the Christmas Tree and take it to shows with engines like Thomas and Percy and small engines and cars. It works fine.
Everyone how I built the layout. I tell them that This is what you do with tracks around the Christmas Tree and don’t know what else to do with it Well I just cut down the Christmas Tree. Yes I will convert the layout to DCC as soon as I get chips in these engines I currently use. I already have it so to just plug in the DCC instead of the DC now.
from Newman